A lawyer for Rupert Murdoch’s News Corp. pleaded with British police and prosecutors not to file corporate charges in a phone-hacking scandal, arguing it would be “apocalyptic” for the company, according to a report.
News Corp. brass so feared the company would be held liable for the hacking mess that it ordered up an analysis showing such a move would likely doom the media giant.
The consequences of a corporate charge could “kill the corporation and 46,000 jobs would be in jeopardy,” the News Corp. report concluded, The Independent of Britain reported.
The scandal has already cost News Corp. $535 million, including financial settlements with 718 phone-hacking victims, according to figures reported to the U.S. Securities and Exchange Commission in May.
Word of the turmoil inside News Corp. leaked a day after it was revealed that Scotland Yard detectives have asked to interview Murdoch “under caution” — a warning given to suspects.
On Tuesday, Andy Coulson was convicted of phone-hacking crimes that occurred under his News of the World editorship. Coulson’s conviction and Murdoch’s pending grilling indicate prosecutors are pursuing corporate charges against Murdoch’s company and could prosecute the 83-year-old media baron himself.
Prosecutors could go after Murdoch under section 79 of Britain’s Regulation and Investigatory Powers Act, which holds company directors liable if evidence shows they consented or connived with the misdeeds of employees, or were negligent.
Murdoch’s right-hand man, Les Hinton, was interviewed by detectives “under caution” in September, but he was not called back for more grilling.
After being informed in 2012 that it was under suspicion, the company sent its top lawyer to London to get authorities to back off on seeking corporate charges, The Independent reported.
Gerson Zweifach, News Corp.’s general counsel, told police and prosecutors it would not be in the “public interest” to put thousands of jobs at risk.
“Crappy governance is not a crime. The downstream effects of a prosecution would be apocalyptic,” Zweifach told authorities, The Independent reported.
“The U.S. authorities’ reaction would put the whole business at risk, as licenses would be at risk,” he said at the meeting.
News Corp. has nearly 30 licenses with the U.S. Federal Communications Commission, including those for Fox News Channel, Fox Sports, Fox Broadcasting Company and the FX network. It also owns the Wall Street Journal, New York Post and 20th Century Fox film studio.
Scotland Yard wanted to grill Murdoch as a suspect last year but agreed to lay off until after the trial of Coulson and others, including Rebekah Brooks, the former News International chief executive.
Brooks, 46, who edited the News of the World from 2000 to 2003, was acquitted Tuesday of phone hacking and bribery charges.
The Daily Mail reported Brooks has been paid more than $27 million by News Corp. since resigning from the company in 2011 as “compensation for loss of office.” News Corp. has also paid her hefty legal fees.
During the trial, it was revealed that Brooks and Coulson engaged in an extramarital affair during their overlapping tenures at the News of the World.
Coulson quit the company in 2007. He became a spokesman for Prime Minister David Cameron, who has apologized for hiring him. The former editor is facing a sentence of two years in jail.
News Corp. officials did not comment Wednesday. The company’s British division, News UK, released a statement Tuesday apologizing for the hacking scandal and saying it has cleaned up its act.
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